Does Dave Ramsey’s 12 percent growth stock fund exist?

Dave Ramsey, the nationally-syndicated radio talk show host, has done a great deal of good for a great number of people. His core message – that the only reliable way to obtain financial peace is to consistently live within your means so that you can pay off your debts and accumulate savings – makes perfect sense.

I cringe, however, whenever he mentions that people should put their savings into — in his words — a good growth stock mutual fund because it will earn 12 percent annually.

Whether it is on his radio show, his website, his books or his educational programs, Dave Ramsey quotes that 12 percent figure again and again. He uses the 12 percent figure to tout the superiority of stock mutual funds over nearly every possible alternative, such as annuities and cash value life insurance products.

I investigated whether the 12 percent return that he quotes is realistic, and I found some surprising facts.

I started my research with Dave’s explanation, which is found on his website. He says, “The current average annual return from 1926, the year of the S&P’s inception, through 2010 is 11.84 percent. From 1986–2010, it’s 11.28 percent.”

These return figures include the value of reinvested dividends.

You think that would settle the issue, but let’s look deeper at three questions.a) Is that truly the S&P 500’s average return?
b) Has the average person actually achieved that return?
c) Is the past return a good indication of the future expected return?
Shockingly, the answer to each of these three questions is a resounding no.

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2 revealing articles about where our country is headed

     I went to a Riverdog's game last night and stood for the national anthem. I take this moment very seriously and with the wind blowing the flag, I take a moment every time and thank God for our country and all freedoms that it allows for.

     I served in the military, my father served, and my brother is serving now.  I believe that America is the best country in the world and God has blessed it.  But I am not respectful of things of late.  Glenn Beck has shed some light on our president that has disturbed me greatly.  His program on Is Obama a Socialist has really set me back a bit.  I was that Glenn refers to as the person who said, "who cares its not that big a deal", and it has shaken me.

     I was disturbed by our lack of leadership in our government and I wanted a change.  The republican side of politics had been a big let down and the democrats have never really lined up with my opinions but something had to give.  I just had no idea Obama was influenced in this way.  The second article that really struck me was one on "natural law".  This article was very enlightening as to where the tea parties are coming from.  I never fully grasped what their approach was until I read this article.  It does not mention a tea party, democrat, or republican, but it identifies a free man's logic and what justice should encompass.

     I am not one to campaign for one candidate or the next, but I do know what my values and opinions are.  Simply put, socialism is not the path to success or greatness.  It is not what our fore fathers had intended and these ideas are poisonous to our liberties and freedom we know and cherish.  I don't like what I have seen referring Obama as a socialist so I have to step back and reexamine my opinion of him.

As far as what this means for health insurance we may never hear the end of it.  I have a feeling the health insurance system will resemble that of a Tricare system with the efficiency of medicaid and social security.  Which means long lines and waits and little reliable service.  It will be more affordable, but the quality of coverage and service will diminish.